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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (947)	11/25/2001 8:23:44 PM
From: craig crawford	Read Replies (2) \| Respond to of 1643

Big Oil Looks Good in New World Order interactive.wsj.com By Dimitra DeFotis War is usually bullish for oil prices. But not now. The U.S. war against terrorism, currently focused on wiping out Osama bin Laden's al Qaeda network and his Afghan protectors, the Taliban, has tested longstanding alliances with petroleum-producing countries in the Middle East. But weak demand from a feeble economy and growing sources of supply outside the traditional producers in the Organization of Petroleum Exporting Countries (OPEC) have helped drive oil prices down, not up. Crude oil prices have plunged more than 50% in the past 12 months to near $17 per barrel. In fact, OPEC has been sparring with independents like Mexico, Norway and especially Russia over production cuts it hopes will stabilize supply. Thus far, Russia and the former Soviet republics have refused to cut output. (Russia produces more than seven million barrels of oil a day, vs. eight million a day for Saudi Arabia, which supplies one-sixth of U.S. petroleum needs.) .................................................................................................................................. Bottom line: OPEC's hope for a median 2002 price of $26 a barrel is fading. Indeed, several brokerages have cut their expectations for oil prices over the next two years to an average of around $20 per barrel. And some are saying it could get even worse. "I am as uncertain as everyone about the impasse between Russia and OPEC," says Dan Rice, manager of the State Street Research Global Resources Fund. "We could see $14 to $15 oil in the next several months." ............................................................................................................................. All the political and economic uncertainty has led investors to seek out stability -- and in the energy sector that means the major oils. The Dow Jones Integrated Major Oil Index is down just under 11% year to date, vs. a 16% decline for the Standard & Poor's 500 Index and a 38% drop for drillers and service companies.